Bloomberg is reporting that Soundcloud is close to signing deals with the world's largest music labels that will protect it from legal wranglings over copyright violations.

The news agency reports that Soundcloud—to music in 2014 what MySpace was to bands in 2004—is negotiating with Universal Music Group, Sony Music Entertainment and Warner Music Group. According to sources , the arrangement would see each label receive a roughly 3 percent to 5 percent stake in Soundcloud, along with a percentage of future revenue. In exchange, the sources claim that Soundcloud would be able to "continue playing songs from the biggest labels" and "avoid potential legal disputes."

Some of the best ideas are also the simplest. And there are few things more simple than SoundCloud, …
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It's a significant chunk of the company to lose, but then the potential benefits could well be worth it: it could even provide a more robust library for SoundCloud users. We just hope record label involvement doesn't detract from what the site does. Because it does it very, very well indeed. Still, either way, it's probably not as bad as Twitter taking the helm. [Bloomberg]